GAO: States “Flexing” Fewer Federal Dollars to Transit

States have the ability to spend 29 percent of federal transportation funds on any mode, but they only "flex" 10 percent of that to transit. Image by GAO, using FHWA and FTA data

Supporters of livable streets may hear about the “flexibility” of transportation dollars and cringe – after all, that word often refers to the ability of states to use bike/ped money for road building. But flexibility can work both ways. Between 2007 and 2011, states devoted $5 billion in surface transportation funds — known in some quarters as “highway money” — to transit programs, according to the Government Accountability Office.

Since 29 percent of federal transportation dollars are available to states to spend on just about any surface mode, that means about 3 percent of all federal funding is getting “flexed” to transit. Between 2007 and 2011, the GAO found, “four states — California, New Jersey, New York, and Virginia — accounted for the majority of flexible funding transferred to FTA for transit projects.” Each of those four states used more than 25 percent of their flexible funds for transit. Meanwhile, 16 states sent transit less than 2 percent of their flexible funding, with Arkansas, Mississippi, North Dakota, South Dakota, Wyoming, Delaware, and Hawaii flexing nothing.

The variability between states highlights a rarely remarked upon aspect of transportation funding: There’s a lot of room for states to spend more on transit under current law, if they choose. In fact, transit dollars go farther when states use these funds, because they only have to pony up the same local match that’s required for highways – usually 20 percent. The local match for transit projects is typically upwards of 50 percent.

Some states set aside a certain proportion of these funds for transit every year, while others vary the amount. “For example, New Jersey transferred about $272 million in flexible funding to FTA in 2010 compared to $130 million in 2009, an increase of almost 110 percent,” the report said. The flexing authority is especially useful to states, like California, which have imposed prohibitions against using state gas tax revenues for transit.

About a third of the flexed funding gets used for vehicle purchases, and another quarter of it goes toward other capital expenses. New transit infrastructure accounts for 22 percent. The money can also help improve service or avoid service cuts.

Over time, some states make major adjustments to the amount of funding they flex to transit. In the 15 years before this GAO study, Pennsylvania was a big flexer but New Jersey and Virginia weren’t.

So states can change. While the GAO shows states are allocating somewhat less to transit than they used to, the pendulum could swing in the other direction. The longstanding formula is that federal funds are split 80/20 split between highways and transit, but states can ratchet up transit’s percentage on their own. If states spent more of their flexible funds on transit, the share of federal funding allocated to transit could climb even without any changes to national transportation law.

Any mode? So not only could this fund transit infrastructure, then; it could fund bike/ped infrastructure, too? That’s astounding. To retrofit one city of 50,000 I cover, Novato, with cycle tracks on every arterial would cost about $3 million. Imagine what California or another state could do with $1 billion of bike/ped funding…

shane phillips

It says that $53 billion of flexible funding was apportioned to the states, and about $5 billion was transferred to the FTA for transit projects. Are these funds really 100% flexible, such that 100% of the money received could be devoted to transit (or any other mode) if the state chose to do so?

Word On The Street

“The contractors want the money, the politicians want to be able to claim credit for
projects, and the engineers want to complete every project that was ever
represented by a dotted line on a map -- no matter how long ago it was
conceived nor how the perceived need has changed.”